Canadian mining major Tech Resources revised down its metallurgical coal sales target for the fourth quarter this year to 5.2-5.7 million tonnes from the previous guidance of 6.4-6.8 million tonnes, due to logistics disruptions caused by heavy rain, flooding and mudslides in British Columbia (B.C.).
The company said rail service between west coast terminals and Teck's B.C. operations remains impacted by recent heavy rains and flooding, with both Canadian National Railway (CN) and Canadian Pacific Railway (CP) operating at reduced levels following service interruptions.
Due to the rail disruption, Teck said it has diverted shipments to Ridley Terminals in Prince Rupert B.C., which though would increase its transport costs during the quarter, but it said it will be able to substantially recover delayed fourth-quarter sales in the first half of 2022 when rail service is fully restored.
Metallurgical coal production this year was expected at 24.5-25 million tonnes, largely unchanged from previous guidance for nearly 25 million tonnes, the company said.
"Strong logistics chain performance leading up to the heavy rain events resulted in historically low clean coal inventories at our operations, mitigating impacts on production volumes. To date, we have not idled any processing facilities and continue to stockpile clean coal at sites and manage available railing capacity to minimize production impacts," it said.
Teck estimated its 2021 annual adjusted site cash cost of sales to be about $64-66/t, slightly above its previous guidance for $59-64/t. Full-year transportation costs for the year are expected to be between $44-46/t compared with earlier guidance for $42/t.
However, the company said the increased costs are more than offset by strong coal prices. The average metallurgical coal price for the three months ended November 30 settled at $371/t, up $168/t compared with the three-month average at the end of August.
(Writing by Alex Guo Editing by Tammy Yang)
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